Mayor Mark A. Smith announced that Moody’s Investors Service has upgraded the City of Bayonne’s bond rating from Baa1 with negative outlook to Baa1 with stable outlook. Smith said, “This upgrade is very good news. It shows that Bayonne has made significant financial progress during my Administration. Moody’s has raised Bayonne’s rating for the first time in more than five years. Our hard work and fiscal discipline are paying off. We have turned a corner and are moving in the right direction.”
Moody’s cited several factors in its decision to improve Bayonne’s rating: 1) The agency recognized that the Bayonne Municipal Utilities Authority’s (MUA) joint venture with United Water and Kohlberg Kravis Roberts (KKR) removed $120 million from the local debt burden. The transaction paid off all the MUA’s debt and a portion of the debt of the Bayonne Local Redevelopment Agency. 2) Moody’s noted that the City no longer has any deferred charges. All charges deferred in the past have been paid off. 3) The City of Bayonne has a declining reliance on tax anticipation notes (TANS) to cover its cashflow needs. 4) Bayonne has a large tax base. 5) Bayonne has declining debt. 6) Bayonne has new revenues from payments in lieu of taxes (PILOTS) coming from newly developed properties.
While the Smith Administration has made significant inroads to reducing debt, Moody’s noted that Bayonne still has an above-average debt burden, which dates back to the previous century. The ratings company also observed that Bayonne has relied on various one-time sources of revenue, although that practice has declined under Mayor Smith’s leadership.
John Moody (1868-1958), the founder of Moody’s Investors Services, lived in Bayonne in his youth in the 19th century. According to author Kate Middleton’s Bayonne historical research, the Moody family lived at several different locations around Bayonne, including 33rd St., 36th St., 41st St., 45th St., Avenue C, and Avenue E. Mr. Moody wrote for The Bayonne Herald, a newspaper of the late nineteenth and early twentieth centuries. Mr. Moody also attempted unsuccessfully to launch a few local publications of his own. In 1900, he began publishing statistical manuals that were the ancestors of today’s Moody’s publications.
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